In a world where retail and customer experience go hand in hand, “phygital solutions” represent the convergence of both physical and digital worlds. This concept seamlessly blends tangible experiences with the connectivity and convenience of digital technology.
Businesses now integrate new technology with change management and digital transformation, prioritizing innovative ways to engage customers and showcase their products, services, and solutions.
Leveraging technologies such as augmented reality, interactive displays, and data analytics transforms traditional brick-and-mortar spaces into dynamic, digitally enhanced environments.
The Rise of Phygital Solutions
Opportunities in Various Sectors
From retail stores to event venues to museums and healthcare offering great opportunities for driving engagement, enhancing customer experience, and differentiate themselves in terms of how they showcase their products and services.
In today’s market landscape where, monopolistic competition is on its peak, there can be many substitutes available for what you are offering. When a customer has more than one option, visually appealing representation can give you an edge.
Augmented Efficiency
Phygital solutions streamline processes, reduce manual work, and improve data collection & analysis for adapting to change with strategy building.
Boost in Sales and Conversions
Phygital marketing can drive more sales and conversions by providing customers with more information and options to make informed decisions.
Increased Customer Retention
Companies with a phygital strategy includes have 91% greater year-on-year (YoY) customer retention compared to those without a phygital plan [SME Futures].
Personalization and Increased Sales
Personalization through phygital solutions can increase revenue by up to 15% and improve marketing-spend efficiency by up to 30% [Mckinsey & Company].
Stockout Prevention
Phygital retail allows for uniform inventory levels and precise reporting, helping to avoid stockouts.
Customer Experience Improvement
Phygital marketing can create memorable moments and provide an easy route for communication with customers, enhancing their overall experience.
Data Collection and Insights
Phygital strategies combine omnichannel communication, enabling companies to gather a vast amount of data about their customer base and gain valuable insights into customer behavior.
Improved Accessibility and Communication
Phygital marketing can facilitate accessibility and communication through tourism applications, improving travel and mobility for city residents and visitors.
Enhanced Customer Loyalty
Phygital solutions can create memorable and meaningful experiences for customers, increasing their satisfaction and loyalty.
Competitive Edge
Phygital marketing can help businesses stand out from the crowd and differentiate their brand from competitors by using cutting-edge technology and creative solutions.
Case Studies: Success in Phygital Integration
Switching your approach to an omnichannel to market your offerings is one of the most accurate ways to bridge the gap between physical and digital touchpoints. For example, retailers who offer customizable products can utilize virtual showrooms enabled with augmented reality (AR) technology for virtual try-ons and product visualizations in-store, allowing customers to interact with products in a digital space while still experiencing the physical environment’s touch and feel.
Room and Board
Last week, I visited several furniture stores to see how they integrate physical and virtual spaces. One standout was Room and Board, which effectively leverages phygital solutions for customer engagement. Their website displays various furniture pieces with detailed 3D model views. [Room and Board]
A notable feature is their use of augmented reality (AR), allowing customers to visualize furniture in their homes by scanning a QR code. This opens the smartphone camera, enabling the placement of furniture models in any location.
Room and Board also offers a virtual experience center, helping customers design their spaces accurately. Customers provide pictures and dimensions, and the store creates a custom design. This solution boosts confidence in purchases, enhancing customer retention.
Integrating visual commerce and the virtual experience center has doubled their online sales and ROI. Previously, their sales ratio was 60:40 in-store to online, but it has now reversed. This success is attributed to offering free virtual space design for customers.
Incorporating interactive digital displays, like a virtual showroom, can redefine the online shopping journey. By providing a digital twin of the physical store with 360-degree product views and data-driven insights, furniture stores can replicate the in-store experience.
Customers can interact with products virtually, explore them from every angle, and receive tailored recommendations. Leveraging data insights helps businesses understand customer behavior and preferences, enabling them to adjust product offerings and marketing strategies effectively.
Overall, phygital solutions create immersive and engaging customer experiences, driving sales and enhancing retention.
Crate and Barrel
Crate and Barrel’s virtual store, a digital twin of their New York flagship, demonstrates the value of phygital solutions. Powered by Obsess, this setup offers customers an immersive experience similar to visiting the physical location.
According to Forbes, Crate & Barrel’s design professionals merge customer visions with the latest technology, extending services to customers at home. This enhances their global reach and bridges the gap between physical and digital shopping experiences.
Crate and Barrel exemplifies the transformative potential of phygital solutions, positioning themselves as a next-generation retailer. These solutions have vast potential in other retail industries like apparel, luxury goods, décor, health, and wellness.
However, cost remains a significant barrier, as many companies lack the knowledge to evaluate the ROI. Outsourcing can solve this issue, with costs for virtual showrooms and visual commerce solutions ranging from $30,000 to $50,000 or more. This approach provides cost-efficiency and access to specialized expertise, ensuring high-quality, customized solutions.
Retailers might find integrating virtual showrooms challenging due to frequent changes in product displays. However, technology allows for regular updates, whether for apparel, luxury goods, or furniture stores, which typically update once or twice a year.
Another challenge is the willingness to collaborate with phygital solution providers. Brands need to work closely with providers, sharing 3D models and their vision for the virtual store. This process is time-consuming but ultimately worthwhile, as it offers a unique and engaging visual representation.
Overall, phygital solutions like virtual showrooms enhance customer engagement and satisfaction, driving sales and improving ROI. Despite challenges, the benefits of integrating physical and digital elements in retail are substantial, offering immersive and personalized shopping experiences.
Conclusion
The fusion of physical and digital elements through phygital solutions marks a pivotal moment in the evolution of retail. From virtual showrooms to interactive displays and visual commerce, businesses are leveraging technology to redefine the customer experience.
As Room and Board demonstrated, integrating visual commerce and virtual experience centers can lead to significant increases in online sales and ROI. Similarly, Crate and Barrel’s investment in a virtual store reflects a commitment to bridging the gap between physical and digital realms. Despite challenges such as cost and technological integration, the benefits of phygital strategies are undeniable, including enhanced efficiency, personalized experiences, and improved customer retention.
This approach not only preserves the essence of traditional brick-and-mortar interactions but also enriches them with the convenience, personalization, and connectivity offered by digital technologies.
By embracing phygital solutions, businesses can create dynamic and engaging experiences that captivate customers, drive engagement, and foster lasting connections in today’s increasingly digital-centric world.